FCC Delays, Denials Foil Rural Schools' Broadband Plans

Fiber-optic construction put on hold

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Hundreds of state and local efforts to connect rural and remote schools to fiber-optic networks have been delayed or rejected by federal officials during the past two years, jeopardizing the push to bring high-speed internet to the country's hardest-to-connect classrooms.

Broadband proponents say the problems stem from confusing barriers erected by the Federal Communications Commission and the Universal Service Administrative Company, which oversee and administer the E-rate, a $3.9 billion program to help schools and libraries pay for internet access and other telecommunications services.

"If the commission really wants to close the digital divide, they should be rolling out the red carpet for these fiber projects," said Evan Marwell, CEO of the nonprofit advocacy group EducationSuperHighway. "Instead, they are rolling out the red tape."

Under former President Barack Obama, the Democrat-led FCC overhauled the E-rate in 2014, raising the program's spending cap and shifting its focus to broadband and Wi-Fi. Included in the changes were new "special construction" rules intended to help rural and remote schools that fall outside of telecommunications companies' existing service areas, by letting them use federal dollars to build or lease new high-speed fiber-optic networks.

In 2016, 426 applicants to the E-rate program sought such special-construction funds, according to an analysis of public E-rate data by Funds for Learning, a consulting group that helps thousands of schools and libraries seeking E-rate funds. But more than half of those applications were denied, compared with less than 4 percent of E-rate applications overall, the group found.

Projects in Jeopardy

The problem isn't getting better, according to the Funds for Learning analysis. As of mid-September, well over 90 percent of 2017 special-construction funding requests were still pending.

On the ground, such problems have cast into doubt projects such as a $7.3 million effort to bring fiber-optic cable to schools in northeastern Utah, one of the most remote areas of the continental U.S.

Such holdups would seem to run counter to the priorities of Ajit Pai, a Republican FCC commissioner whom President Donald Trump appointed to run the agency in January. Pai has long said he wants to streamline the cumbersome E-rate bureaucracy and expand broadband access to rural America.

In a statement, FCC spokesman Mark Wigfield declined to address the specific concerns raised around the special-construction applications, instead pointing to Pai's recent efforts to improve the processing of E-rate applications in general.

"The pace of E-rate decisions and disbursements for funding year 2017 has improved," Wigfield said. "The chairman is committed to building on that improvement."

Frustrated by Delays

Overall, the E-rate program has contributed to "extraordinary progress" in connecting schools to high-speed internet, according to a recently released report from EducationSuperHighway. Since 2013, more than 35 million K-12 students have gained access to school internet that meets minimum federal connectivity targets, and the cost of school broadband has declined dramatically.

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But more than 2,000 schools still don't have fiber-optic connections, EducationSuperHighway found. More than three-fourths of those are in rural areas.

New Mexico is one of the states that has attempted to address the challenge by taking advantage of the new E-rate rules. In 2015, Republican Gov. Susana Martinez earmarked millions of state dollars to match federal money expected to become available for special-construction projects.

During the 2016 E-rate funding cycle, 13 New Mexico districts sought such federal funds, submitting special-construction applications to the Universal Service Administrative Company.

But decisions on those applications "stalled," Martinez wrote in a scathing letter to USAC in October 2016.

"Our school districts are hesitant to invest in a federal program that may not deliver on its promises," Martinez's letter reads. "As a result of USAC failing to reimburse our state public schools and libraries in a timely manner, progress has been delayed in connecting more New Mexico students to faster internet speeds."

Across the country, it's become clear that any special-construction projects are being "flagged for special scrutiny," according to Brian Stephens, an analyst for Funds for Learning. Districts looking to build or lease new fiber-optic networks have been denied at disproportionately high rates, Stephens said, often after lengthy delays and for reasons that remain murky.

Take, for example, the experience of the Utah Education and Telehealth Network, a state organization that during the past two decades has successfully leveraged E-rate funds to help bring 1 gigabit-per-second or faster fiber-optic connections (which meet not only current federal connectivity targets, but also future targets) to all but a handful of Utah's 1,098 K-12 schools.

In July 2016, the group applied for roughly $3 million in E-rate funds to run 70 miles of fiber through the mountains of Daggett County, with the aim of giving students in remote schools there the same high-speed connections as their peers in most of the rest of the state. STRATA Networks, a private telecommunications company, committed to put up over $4 million in private capital for the project.

USAC officials took 14 months to render a decision, repeatedly requesting the same information from Utah officials and requesting proprietary information that STRATA considered confidential. Then, this September, USAC denied the project, confounding the executive director and CEO of the Utah network, Ray Timothy, who had been planning the project since 2012.

Costs Are Rising

The Daggett County project should be a model for the rest of the country, Timothy said. To the best of his knowledge, the network has followed every federal guideline and answered every question. His last hope is that Pai and the FCC will intervene and overturn the earlier denial, an outcome that Timothy requested during a face-to-face meeting with Pai in Washington in late September.

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Wigfield, the FCC spokesman, said that all E-rate applicants have the right to multiple opportunities for appeal.

At this point, though, Timothy said that even if USAC's initial denial is reversed, construction on the Daggett County project won't be able to happen before winter. And costs have already gone up, in part because the administrative delays have lasted longer than the leases on the equipment that was to be used to lay the new fiber-optic cables.

"We have an extensive history working with USAC and the FCC, and it's always been a very positive experience," Timothy said. "We haven't seen [barriers] to this degree in any of our projects in the past."

Vol. 37, Issue 11, Page 9

Published in Print: November 1, 2017, as FCC Delays, Denials Foil Rural Schools' Broadband Plans
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